USA – NEW JERSEY Law and Practice Contributed by: David Freylikhman, Cory Mitchell Gray, David Jensen and Jody Saltzman, Greenberg Traurig LLP
engineers and inspectors to oversee construc - tion and development within their jurisdictions. In the case of construction (as distinct from unlaw - ful use), “stop work” order is usually issued by a code enforcement officer with a violation of such order resulting in fines, which can be significant. In the case of an unlawful use, a notice of vio - lation would be served on the property owner; again, violations of the permitted uses of a given property would typically result in fines. Each day of non-compliance with the applicable uses in a zone, or with construction that is not permit - ted, constitutes a separate violation. In addition, municipalities will typically not issue permits until it has first been ascertained that the construc - tion has been authorised and that the use is a permitted one. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets New Jersey recognises various business enti - ties that are available to owners of real estate, including limited liability companies, corpora - tions and partnerships. The most common enti - ty is the limited liability company, which affords the most flexibility and pass-through taxation, as well as fewer formalities than corporations. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity Corporation A corporation in New Jersey, as elsewhere, pro - vides a separation between the shareholders, directors and officers. The shareholders are the owners of the corporation, and they elect the board of directors. The directors manage the business trajectory and activities of the corpora - tion. The directors appoint officers who manage
the day-to-day business and affairs. The main benefit of a corporation is that shareholders have no personal liability for the corporation except for certain specific express instances. Limited Liability Company A New Jersey limited liability company (LLC) has many of the same benefits of a corporation, but is preferred for its flexibility of management while affording liability protection to its members. In addition, unlike corporations, LLCs are not taxed on the entity level; rather, tax liability passes through to each of the members individually. Partnerships Partnerships have become far less common in recent years, especially with the increased popularity and ease of LLCs. Partnerships in New Jersey are more likely to be limited part - nerships that combine a limited partner and a general partner. The limited partner is insulated from unlimited liability, but does not participate in the management or operation of the business. 5.3 REITs REITs are available in New Jersey and can be either public or private. 5.4 Minimum Capital Requirement There are no minimum capital requirements in New Jersey. 5.5 Applicable Governance Requirements In all instances, annual reports must be filed with the State of New Jersey Division of Revenue and Enterprise Services. 5.6 Annual Entity Maintenance and Accounting Compliance Many property owners have internal account - ing groups or hire outside accounting firms to
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